Harley takeover rumours
Added on Thursday, March 18th, 2010 by Carole Nash Editor | No Comments
Harley takeover rumours
Harley-Davidson shares jumped by around 7% this week on the New York Stock Exchange, as rumours circulated the business world that the bike-maker could be taken over, reports Alastair Walker.
The motorcycle company has been in the process of restructuring over the last 18 months as the global economic downturn affected its home market sales. A general 40% drop in motorcycle sales over the USA, plus rising defaults on Harley’s motorcycle finance plans, have caused H-D to close down Buell, lay-off workers and put the MV Agusta brand up for sale.
The rumour is that Kohlberg Kravis Robert, a private equity finance company who specialise in raising cash to fund corporate turnarounds, are looking to put a buy-out deal together. KKR currently invest in the Alliance Boots chain of pharmacy outlets, Sealy beds and the Toys R Us chain. Although the stock in Harley Davidson has more than doubled in value over the last year, it is still vulnerable to some kind of takeover. But the sentimental value that many Americans feel for the brand means it almost certainly won’t involve any `foreign’ companies.
The most likely outcome is that a consortium of US investors will take control of H-D, once the thorny questions of pensions liabilities, union deals on casual worker hours and the disposal of MV Agusta have been agreed behind closed doors. That may take some time to sort out, especially the MV Agusta sale, which has the likely involvement of both the Italian government and unions to add grit to the wheels of commerce.
Meanwhile one of the most famous Harley dealership chains in the USA, Bruce Rossmeyer’s, closed their Fort Lauderdale shop this week, as the recession continues to affect motorcycle sales across the USA. Rossmeyer lost his life in a road crash last year, but his flagship showroom at Ormond Beach near Daytona, arguably the biggest H-D store in the world, remains open.
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